FYI- There is a NEW loan Program for Southern Oregon (Jackson and Josephine Counties) That will actually GRANT you the Down Payment. So Please Ask Me and I will send you the info (see my contact info below)
Financing Options For First Time Home Buyers
Buying your first home can be a thrilling experience. However, the most difficult part of the process is often the search for the right financing option.
The good news for perspective home buyers is there are a lot of financing options available today. First time buyers are often overwhelmed by too much information that they have to deal with simultaneously.
This is the reason why financial experts advise first time home buyers to set a reasonable time frame to get prepared. The buying process is going to consume a lot of time and energy.
Some of the more accessible financing options available include:
FHA Loan- The Federal Housing Administration seems to be more forgiving today than ever before. Aside from the fact that they now only require 1% to 3% of the down payment, they also offer loans to people with relatively lower credit scores. Conventional lenders often require a credit score of at least 720, while the FHA offers mortgage loans to first time buyers with lower scores. First time home buyers are the perfect candidate for the FHA loan. The FHA loan is federal government housing loan program especially made for high risk borrowers. First time borrowers may be considered a high risk borrower because of the lack of credit history with regards to home mortgage loans.
Traditional Loans- Traditional loans are loans that are insured by the federal government. Traditional loans carry higher upfront fees than FHA loans. They are also harder to acquire, considering that private lenders today are tightening their requirements due to the growing number of people defaulting on their mortgages. For this reason, many traditional lenders only qualify those who have a pristine credit history and who could pay at least 20% of the total value of the property.
A fixed rate mortgage loan is considered a traditional loan. It is fully amortized, which means that the interest rate remains the same throughout the duration of the loan. The duration of the loan is also fixed from 10 to 30 years. Many people claim that fixed rate mortgages are more expensive the Adjustable Rate Mortgages, which is another type of mortgage loan. However, if the overall market interest rate increases, your fixed rate mortgage interest rate will remain the same and the interest rate for an Adjustable Rate Mortgage, on the other hand, will increase significantly. However, according to some experts, a majority of ARM borrowers save money in the long run, when compared to those who have fixed rate mortgage.
VA Loans- A Veteran’s Administration or VA loan is a mortgage loan provided for eligible American Veterans. As of January 2012, the loanable amount for VA loans with no down payment is $625,000, and as much as $1,094,625 in high cost countries such as Hawaii, Alaska, Guam, and US Virgin Islands. The stipulations of the VA loans guarantee all mortgages provided by VA qualified lenders. For this reason, qualified veterans may borrow to up to 103.15% of the value of the home.
If you are trying to search for the best home mortgage lender, the best approach is to put in a lot of time evaluating how much you can actually afford or finance in the future. Homebuyers who have more than enough money to put down will naturally have more buying power when negotiating with the lenders. Those who are after big loans are more likely to receive a high risk adjusted rate and may have to borrow money from private or traditional mortgage lenders. You may of course ask for assistance from brokers and mortgage lenders, but knowing what you want and what you can live with, must be your primary basis when making a decision.
Leading Real Estate Expert, ALC
Superior Real Est. Services Since 1999
Keller Williams Realty, Southern Oregon
Education Chair, Principal Broker
Ph / Text 541-326-2300